Retailers and Health Systems Can Improve Care Together

The Covid-19 pandemic and its aftermath have starkly highlighted the shortcomings of health care delivery in the United States and many other countries: rapidly growing costs, inconsistent quality, and inadequate and unequal access to primary and other types of care. However, if retailers and health systems were to forge strong partnerships, they could play a major role in addressing these megachallenges. While some retail–health care partnerships exist—for example, one between Target and Kaiser Permanente in Southern California began in 2014—they are rare and have only scratched the surface of their potential. To fundamentally change how health care is delivered, more of these partnerships are needed, and many of those that exist must be reoriented toward a different goal. Rather than focusing on the direct-to-consumer model that retailers have largely employed to provide a handful of basic services, the partnerships must offer much broader care. They should, of course, target the needs of consumers, but they must also help employers and insurers manage the overall health—and health care spending—of the populations they cover. In this article, we make the case for these partnerships and highlight four key actions that retailers and health systems must take to achieve this larger goal.

[ 1 ] Move Beyond Convenience to Offer Comprehensive Care

The health care offerings of many retailers—whether on their own or in partnership with health systems—are mostly limited to routine, one-off services such as taking a strep throat culture, treating an ear infection, or administering a shingles vaccine. Retailers have emphasized convenient care. But now they must shift to comprehensive care.

The focus on convenience can be traced back to the origins of retail clinics over two decades ago. MinuteClinic, now a division of CVS Health, was founded as QuickMedx in 2000 to offer some primary-care services in a retail setting. (One of us, Robert, is an adviser to several private companies in the health care industry, including one that was acquired by CVS.) Walgreens, Walmart, and other retail pharmacies quickly offered similar services. The main purpose of the clinic model, which we call Retail Care 1.0, was to drive traffic into stores, encourage cross-selling, and redeploy idle square footage freed up from commerce shifting online. Services were typically limited to those that could be provided by a nurse or physician assistant. Although these clinics played a critical role in scaling up testing and vaccination efforts during the Covid-19 pandemic, they provided care in the form of isolated episodes that did not involve follow-ups with patients.

Some retailers, including CVS, Walgreens, Walmart, and Amazon, are beginning to move beyond Retail Care 1.0 by adding services such as coaching to manage chronic diseases, primary care, mental health counseling, and home care. For example, a recently announced partnership will allow Costco members to pay out of pocket for simple telehealth services offered by Sesame, an online marketplace for health care appointments. Amazon Clinic similarly provides telehealth video visits that customers seeking “convenient, affordable care for common conditions” can pay for directly. But these offerings still fall short of comprehensive care. For example, they lack integrated services for patients with complex conditions who must regularly interact with multiple providers. Even with the best preventative care, patients will need complex cancers treated, orthopedic surgeries performed, and coronary stents inserted. A close partnership between a retailer and a health system will help integrate the many elements involved in treating more-serious conditions.

Home delivery giant Instacart recently partnered with care providers to deliver food to patients’ homes—including prescription meals for people with hypertension or diabetes.

Beyond integrated clinical services, partnerships between retailers and health systems could also help address the social and economic factors—often referred to as the social determinants of health—that lead to chronically poor health outcomes for many patients. Several health systems, such as Boston Medical Center and Geisinger Health, have initiated “food as medicine” initiatives to help their patients with diabetes and other chronic conditions access healthy foods. But major retailers, which have much greater experience in managing grocery services—both in stores and via home delivery—could provide those services more effectively and at a much larger scale than a hospital system could. A handful of health systems have realized this. A case in point: Home delivery giant Instacart recently partnered with care providers such as Boston Children’s Hospital and Mount Sinai Health System to deliver food to patients’ homes—including prescription meals for people with hypertension, diabetes, or kidney dysfunction. (One of us, Vivian, serves as a trustee at Boston Children’s Hospital.)

[ 2 ] Move Care From Clinics Into the Home

Although in-store clinics are more convenient and affordable than most medical offices and hospitals, there is a place that is even more so: patients’ homes. During the pandemic, health systems dramatically expanded their telemedicine services, but they mainly focused on a limited set of episodic services such as annual physicals, performing triage to determine whether someone needed to go to a hospital, and psychotherapy. More recently, they have begun providing home-based chronic-disease management (to prevent complications that require hospitalization) and “hospital at home” services (higher-level care in the home for patients who in the past would have needed hospitalization). Supporting such care involves more than a laptop and an internet connection; it requires a series of devices to help providers monitor patients and enable patients to monitor themselves. Efficiently equipping patients’ homes with such devices is a capability that most health systems lack. Partnerships with retailers could fill this gap.

Consider Best Buy, which has been forging alliances with leading health systems such as Geisinger Health, NYU Langone Health, Atrium Health, and Mass General Brigham. (One of us, Robert, serves as a trustee of Brigham & Women’s Hospital, a member of the Mass General Brigham system.) Best Buy’s strategy in health care is to serve as the “technology enabler” of in-home care by leveraging the skills of its Geek Squad professionals, whom consumers already trust to install electronic devices in their homes. In its partnerships, Best Buy assumes responsibility for installing and servicing home-based technology that the health systems recommend for their patients. These include tablet devices from Best Buy’s Current Health unit, which supports the in-home collection and reporting of data from a range of third-party devices such as vital sign and activity trackers, glucose monitors, and smart scales. The collected data can be used by clinicians during a virtual primary-care visit and allows for remote monitoring of patients with chronic conditions, such as congestive heart failure and hypertension, and those recovering at home after a surgical procedure.

Best Buy ran a pilot with 300 patients who had complex hypertension and had been admitted to Geisinger’s “chronic care at home” program. Using the Geek Squad agents, the time between a physician prescribing use of a device and having it set up in a patient’s home—previously 96 hours, on average—was cut in half. In addition, patients were 19% more compliant in using the technology prescribed in their care plans and reported 18% fewer technical issues with their devices.

[ 3 ] Leverage Data to Improve Clinical Care and the Customer Experience

Retail chains and health systems both collect massive amounts of information about the customers they serve. Many retail clinic chains have the ability to share data about the care they provide to a customer—whether a vaccination or a prescription—with that individual’s primary-care physician. Even so, the clinical data held by retailers and health systems largely remains in separate databases.

At the most basic level, an effective retailer–health system partnership would include an integrated electronic health record (EHR) for patients receiving care at each partner’s facilities. The partnership between Target Clinic and Kaiser Permanente is notable in this regard: The clinical data of patients treated at both partners’ sites is seamlessly integrated into Kaiser’s EHR. Such sharing should become more common in the United States under provisions of the recently implemented 21st Century Cures Act, which aims to increase interoperability and data sharing across health care organizations.

For food-as-medicine programs, this exchange of data could allow prescriptions to be filled automatically and delivered to a patient’s home by a retailer’s online grocery service. Retailers could also offer patients—with their permission—ongoing and targeted reminders about healthier foods or fitness gear. Although there are important concerns about privacy, which we discuss below, there is also the potential for retail and health system partners to create a seamless experience for customers in a manner that improves care coordination and health.

The integration of data about patients’ health and consumer purchasing could create opportunities to mine that data to benefit both patients and the employers or insurers that pay for their health care. These opportunities include predicting waves of infectious diseases and guiding certain clinical treatments. For example, researchers applied machine learning to data on consumer purchases at a supermarket chain in Italy to improve the prediction of flu outbreaks. Notably, some of the strongest “signaling” in this model came from purchases of items such as tissues, oranges, and the vegetables commonly used to make soups. Such insights could help health systems and payers accelerate preventative measures, such as encouraging vaccinations, and better plan their staffing and supply chain needs to address local infectious disease outbreaks.

Beyond predicting spikes in disease, combining data about consumers’ purchasing behavior (held by retailers) with electronic health records (held by providers) will help develop new and better approaches to treatment. It can provide insights into the links between consumer behavior and the effectiveness of various medical interventions, such as the use of digital apps to manage chronic diseases. Further, it can guide employers and insurers in designing the benefits of their health plan offerings—for example, by suggesting which disease management programs are most effective for a particular employer’s workers and their families or for members of a health care plan.

While the case for linking retailers’ and health systems’ data is strong, it does raise significant concerns around consumer privacy. These challenges are not insurmountable. Indeed, retailers and health systems have experience in complying with data privacy requirements of such laws as the European General Data Protection Regulation (GDPR) and the California Consumer Privacy Act—both of which apply to online commerce—and the Health Insurance Portability and Accountability Act (HIPAA). To the extent that retailers and health systems can jointly approach regulators to make the case for the value of their partnerships, they have the potential to help shape evolving regulations to allow them to leverage data and analytics responsibly as they manage both the cost and quality of health care.

[ 4 ] Change How—and by Whom— Health Care Work Is Done

Retailers and health systems must address health care’s looming workforce crisis; they must collaborate to find enough workers and better prevent employee burnout. Labor shortages, a long-standing issue in health care, have become even more acute in the wake of the Covid-19 pandemic. One estimate suggests that the U.S. health-care sector will have a gap of 4 million jobs by 2026, mostly consisting of frontline workers, ranging from nurses to technicians to primary care doctors. A study of data from the 2022 National Nursing Workforce Survey found that 51% of nurses reported feeling “emotionally drained,” 56% felt “used up,” and 29% agreed with the statement “I’m at the end of my rope.” The recent strike by nonphysician union workers at Kaiser Permanente highlights how staffing shortages impact quality of care. Workers to support more care at home are also in short supply.

Retailers can help address the shortage of health care workers. For example, Walmart subsidizes educational expenses for its employees who pursue training for jobs such as pharmacy technicians, opticians, medical assistants, and wellness coaches through its Live Better U program. The program not only supports Walmart’s direct efforts in health care but also provides career alternatives for its store employees as more retail sales move to online channels. For their part, health systems could help retailers ensure that the training programs meet quality standards for various health-care roles and could help their graduates find jobs. In partnership, the two can create a new workforce model that delivers care by the right professional, at the right location, and with the right data.

[ ~ ] Realizing the Potential of Partnerships

For retailers and health systems to make the most of their partnerships, they must answer three key questions:

What is our strategy? To succeed, retail and health system partners must agree on the market need they will serve together and the value that will be generated for each of them. For example, is the goal to increase the catchment area for the health system, bringing access to care to a broader swath of the population? If so, the partnership must be part of a larger network strategy that details how retail clinics could reduce out-of-network visits or trips to expensive emergency departments, thereby integrating care and driving better health outcomes. In addition, to achieve the partnership’s goal of expanding access, how could the retailer alter its health-related services (such as its pharmacy or a food-as-medicine program) to meet an individual’s needs more comprehensively? If patients are identified in the retail clinic with conditions that then require care in the health system, how would retailers share in the financial gains from the subsequent hospitalization or procedures?

Similar strategic questions should be addressed for other aspects of a partnership, including health monitoring in the home, developing cobranded clinical programs, and creating analytics systems that use integrated clinical and consumer data.

What skills will each partner contribute? In developing an aligned strategy, partners must determine the specific functions that each will perform and how those efforts will be coordinated. The first step is to determine what a given retailer and health system are uniquely positioned to do well. For example, retailers are probably better equipped to lead efforts to place technology in patients’ homes, and providers are better suited to establish the clinical protocols used during visits by home health aides and visiting nurses. Understanding what each partner does well comes with the equally critical need for each partner to accept that there are some things that it does not do well.

There will most likely be certain capabilities that neither party in a retailer-provider partnership is well suited to provide, and so others will need to be enlisted to join the venture. Consider the need to deliver health care to patients in or near their homes. Making such a service viable requires expertise in managing a fleet of vehicles equipped to provide nonemergency clinical services. This is not a capability that either retailers or existing health care providers tend to possess. Enter companies like DocGo, which has established a partnership with Dollar General to put vans in store parking lots and also works with provider organizations, such as Visiting Physician Services, in New Jersey, to transport clinical providers to patients’ homes.

Another example is the use of drones to deliver essential health-care products to patients, on demand, in their homes. Walmart is working with Zipline, a drone-delivery specialist, to deliver health products, such as thermometers and over-the-counter medications, to customers’ homes in minutes. Intermountain Healthcare, a large health system based in Salt Lake City, is also working with Zipline to deliver necessary medicines in the same manner. While it is impressive to see what retailers and health provider systems are doing separately with third parties like DocGo and Zipline, it is hard not to wonder how much additional value could be created if retailers and health systems in a given area were to approach these third parties together. For instance, such a service could provide even greater convenience and efficiency by delivering drugs, food as medicine, and other retail products together.

How will employers and insurers pay for the value created by the partnership? To move toward a robust model, retailers and health systems must focus on helping employers and insurers manage spending while improving population health. For example, retailers and health systems, working together, could manage information about a patient’s care episode as she moves from an initial visit in a retail clinic to subsequent care in the hospital followed by recovery in her home. By coordinating care, retailers and health systems could reduce costs—for example, by avoiding complications and costly readmissions—in ways that could lead to lower health care bills for employers. They could move away from the fee-for-service model that dominates retail clinics, physician offices, and many hospitals and move toward subscription models that would pay the partnership a fixed amount per member per month to cover nearly all health care needs. In doing so, these partnerships could provide employers with additional options—beyond existing health insurers—for providing coverage to their employees.

. . .

To date, partnerships between retailers and health systems have fallen short of their potential to improve population health. That’s because each party has remained in its comfort zone, focused on preserving its core business. For many retailers, the priority is still bringing customers into their stores; for many health systems, it’s attending to high-acuity patients and keeping hospital beds as full as possible rather than providing holistic care. Retailers and health care systems must move toward a model that produces better health outcomes for populations, not simply more health care.

If retailers and health systems can work to implement the four actions we discussed, they can reduce health care costs while improving access and quality. They could make the care they provide more comprehensive and provide it closer to patients, even within their homes. They could generate insights from new sources of integrated data. They could redesign the work and the workforce required to better deliver health care to patients. If they focus on these priorities, partnerships between retailers and health systems have the potential to change not only the underlying business models and performance of both parties but also those of the broader health system. They could generate improvements that would benefit not just patients but also the organizations that pay for their health care.

Copyright 2024 Harvard Business School Publishing Corporation. Distributed by The New York Times Syndicate.

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